OWC Pharmaceutical Research Corp (OTCMKTS: OWCP), through its wholly owned Israeli subsidiary, One Word Cannabis Ltd., conducts medical research and clinical trials to develop cannabis-based pharmaceuticals and treatments for conditions including multiple myeloma, psoriasis, fibromyalgia, PTSD, and migraines. OWCP is also developing unique delivery systems for the effective delivery and dosage of medical cannabis. All research is conducted at leading Israeli hospitals and scientific institutions, and led by internationally renowned investigators.
In fact, the Israeli government is one of the few countries worldwide to approve clinical studies with cannabis.
The company recently announced that it received Institutional Review Board (IRB) approval to conduct safety testing on its proprietary topical cream compound for treatment of psoriasis and related skin conditions.
Psoriasis cream is one of the major/critical business drivers for the company. It is in final round of efficacy testing before it hits shelves. Management confirmed that this approval is a significant milestone for the company & immediately after approval of psoriasis treatment formulation; OWCP began receiving requests for its topical psoriasis cream product from patients suffering from the condition.
OWCP further added, that after several years of extensive research, they now expect to launch psoriasis cream to the market during second quarter of 2017 or soon thereafter. Beyond psoriasis, it is also pushing multiple myeloma candidates through early stage trials, with the goal of getting the assets into clinical studies before the end of 2017. The company is scheduled to make a presentation at the Wall Street Conference on Wednesday, March 1, 2017 to discuss these developments & the future potentials in detail.
OWCP operates in Marijuana industry that has rapidly & recently turned into a multi-billion dollar massive growth market across US and Canada with many new states legalizing it. According to a recent estimates, cannabis market crossed $6.7 billion from the U.S. alone in 2016, and that sale of cannabis are set to rise to $22.8 billion in the U.S. by 2020.
There are only a handful of publicly traded companies focused on meaningful, advanced stage cannabinoid-based, pharmaceutical development. The growing popularity of this industry is seen as major inflection point for current licensed producers & researchers. In particular, existing cannabis players with sizable market cap & advanced stage product pipeline are expected to grow their business with relatively lesser competitive threats.
OWCP is one of the promising entities for cannabis investors. The company has its own IP’s, which commands significant value. Furthermore, as it move towards approval and commercialization process, the intrinsic value of the company is expected to increase significantly. With a seasoned management team, OWCP is at a critical inflection point.
In fact, supported by abovementioned reasons, company’s stock has unsurprisingly found enormous strength in the recent past. It has been powering due to the favorable impact of the company’s recent announcements and growing popularity of the industry.
Description & manufacturing set-up:
OWC Pharmaceutical, through its wholly owned subsidiary, One world Cannabis Ltd, conducts medical research and clinical trials to develop cannabis-based pharmaceuticals and treatments for conditions including multiple myeloma, psoriasis, fibromyalgia, PTSD, and migraines. It is also developing unique delivery systems for effective delivery and dosage of medical cannabis. All its research is conducted at leading Israeli hospitals and scientific institutions, and led by internationally renowned investigators.
One world Cannabis Ltd was set up in 2014 in Israel as a Wholly owned subsidiary of OWC Pharmaceutical Research Corp. (OTCQB:OWCP). One World offers OWCP with international access to the best research facilities and researchers in medicinal cannabis.
The state of Israel has been supportive of cannabis study and scientific research since 1960s’ in renown academic and research hospitals. The Medical Cannabis Unit under the Health Minister Office is operating in Israel since 2003.
Major Divisions of the Company:
R&D Division: All OWCP studies are following approved clinical procedures by IRB protocols conducted in Israeli hospitals facilities. Each new product targets a specific disease or medical conditions, with a particular emphasis on identifying unique formulation and efficient delivery systems to optimize the bioavailability of dosage.
Consulting Division: This division focuses on supporting and aiding organizations and states which are on the way to implement MMJ program and are looking to adopt the Israeli MMJ Methodology which includes patients’ treatments, recommended daily dosage, manufacturing standards, education programs, knowledge transfer to physicians and more.
Key Cannabis Based Products (IP owned by OWCP) – Likely to be commercialized:
Topical cream: Treatment for different skin diseases starting with tested psoriasis. Estimated market size ~8 Million Psoriasis patients US & Canada (2.5% of population).
Sublingual Soluble tablet: For conditions like, replacement of smoking & pain treatment. Estimated market size – more than 10 million potential patients in the approved MMJ states.
Strategic manufacturing, distribution & marketing Alliances:
Medmar – Based in Maryland, certain rights to manufacture, produce, publicize, promote and market OWCP’s licensed products in the United States.
Michepro – A European distribution company which signed a Joint Venture agreement, 75% (OWCP) 25% (MICHEPRO Ltd), to set up a European entity to promote, manufacture and sell OWCP products in that region.
Team & Facility:
OWCP is led by a team of experienced professionals, having substantial experience in areas of medical cannabis, clinical research, healthcare management, international business and financial markets. This knowledge, alongside their commercial experience, is likely to help OWCP’s business risk profile.
In fact, Dr. Yehuda Baruch, who is leading OWCP’s overall operations as “chief scientist officer” and regulatory affairs, is a world renowned Psychiatrist, who founded, implemented and Headed the Israeli Medical Cannabis Unit under the Minister of Health for over 10 years.
Recent operational break-through:
It recently announced that it has received Institutional Review Board (IRB) approval to conduct safety testing on its proprietary topical cream compound for the treatment of psoriasis and related skin conditions.
Also, In October’16, OWCP completed development of a proprietary, cannabinoid-enriched sublingual tablet for administration of medical cannabis.
OWCP continues to make significant progress in R&D of cannabis-centric medical treatments, specifically with psoriasis cream, which is being readied for the U.S. and European markets. The company is focused on having products on the shelves in the MMJ states this year.
OWCP is scheduled to make a presentation in the upcoming Wall Street Conference to be held on March 1, 2017. OWCP is likely to provide an update about the Company’s progress, specifically focused on its research and products in development, and most importantly the Company’s plans for the future, sales and marketing in the US, Canada and Europe this year (2017).
Industry overview:
The legal cannabis market has expanded considerably over the past two years, generating significant and growing investor interest.
Source: Investor presentation
Key Stock Influences
Some key influences that might govern future stock price performance include:
- Timely initiation of U.S marketing program for Psoriasis Topical Cream during second quarter of 2017.
- Meaningful and commercially viable outcomes for its ongoing research about advancement of cannabis-based treatment for multiple myeloma.
- OWCP’s business risk profile is impacted by significant product concentration. There is just one thing that the company is presently relying upon i.e. “Psoriasis cream”. Therefore, OWCP’s ability to evaluate the launch of one or more studies to determine applicability of cannabinoid-based pharmaceuticals for other medical conditions and disorders, such as fibromyalgia and migraines – is critical for them.
- OWCP is still a pre-commercial stage company and has not yet generated meaningful revenue and will likely operate at a loss as it grows its market position and seeks ways to monetize it. Therefore, any time or cost overrun in its ongoing R&D activities and its impact on business & financial profile will remain a key business sensitivity factor.
- Also, given the fact that OWCP is burning through cash as it continues to spend in research development, it will need to access additional funding to continue operating. This is likely to lead to dilution in its present equity capital. Moreover, any sort of inability to raise fund in a timely and prudent manner, could materially & adversely affect its operations and liquidity.
Earnings Review
For quarter ended September 2016, OWCP have not generated any revenue. The company has operating expenses related to general and administrative expenses and research and development.
During three months ended September 30, 2016, it incurred a net loss of $140,794 due to general and administrative expenses of $74,898, research and development expenses of $30,363, a loss of $4,521 related to a debt settlement, interest expense of $2,055, a valuation loss on derivatives of $2,426 and expenses due to amortization of debt discount of $26,531 as compared to a net loss of $408,225 due to general and administrative expenses of $311,391 and research and development expenses of $96,834.
Operating Metrics
Its general and administrative expenses decreased by $236,493 during September 30, 2016 as compared to the same period in the prior year. This decrease of 76% is primarily the result of decreased stock-based compensation. The charge relating to stock-based compensation expense was $0 for September 30, 2016, compared to $119,199 for September 30, 2015.
Research and development expenses also decreased to $30,363 during September 30, 2016, compared to $96,834 during the same period in the prior year. The decrease by $66,471 or 69% was primarily due to decreased payments related to our collaboration agreements.
Cash Flow & Balance Sheet
OWCP has an authorized capital of 500,000,000, out of which, total outstanding shares are 139,255,474 (30 Dec 2016) & the float is 86,515,750 (31 Oct 2016)
Based upon its cash position of $90,327 as at September 30, 2016, OWCP need to raise additional capital, either through equity or debt, in order to fund its ongoing operations including research and development initiatives for the next twelve months. T
The total accumulated deficit as of September 30, 2016 and December 31, 2015 were $8,177,778 and $7,548,866, respectively.
The company recently filed form 8-K for Unregistered Sales of Equity Securities, informing that during January 9, 2017 through February 22, 2017, OWCP issued and sold equities to accredited investors.
Stock Performance
On Friday, February 24, 17, OWCP shares surged by 18.01% to $2.19 on an average volume of 4.88M shares exchanging hands. Market capitalization is $321.17 million. The current RSI is 78.82.
In the past 52 weeks, shares of OWCP have traded as low as $0.01 and as high as $3.23.
At $2.19, shares of Zeno are trading significantly above their 50-day moving average (MA) at $0.56 and above their 200-day MA at $0.18.
The present support and resistance levels for the stock are at $1.73 & $2.43 respectively.
Traders News Source Mission Statement
We strive to highlight the future potential as well as the inherent risk in each small cap company we cover while remaining neutral as a leading third-party equity research firm. Please read our privacy policy and full disclaimer below.
***Receive updates and real time small cap stock profiles from Traders News Source by sending a text from your mobile phone to the number “25-827” with the word “Traders” as the message. Opt out anytime by replying “Stop”
Our group is up over 200% since January 2017 with four profiles. Stay tuned our next small cap profile will be issued via text and email soon.
Disclaimer
Traders News Source is a wholly owned subsidiary of Traders News Source LLC, herein referred to as TNS LLC.
Traders News Source has not been compensated for this report by anyone and the opinions if any are that of the author Vikas Agrawal, CFA. Author’s Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I, wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in the article.
This web site, published by TNS LLC, and is an investment newsletter that is built on the premise of assisting individual investors in learning about investing. Our goal as publishers of financial information is to provide research and analysis of investments to our subscribers. TNS LLC does not give buy or sell recommendations. We do purchase distribution rights from analyst, financial writers and bloggers for a fee that may be licensed to issue price targets and recommendations. Furthermore, we encourage you to speak to a licensed professional prior to making an investment in any type of publicly traded security.
We do sell advertising to other companies including brokerage firms, web sites, publicly traded issuers, investor relations firms, and investment publications, among others. TNS LLC makes no warranty as to the policies of these organizations, and in no way endorses their offers, services, or the content of their advertisements.
When an advertiser is a publicly traded company or a third party acting on behalf of a public company, we fully disclose all compensation in the email advertisement. Such disclosure is included in a disclosure statement in each of the advertisements sent via email.
17B Disclosure
Our reports/releases are a commercial advertisement and are for general information purposes ONLY. We are engaged in the business of marketing and advertising companies for monetary compensation. Never invest in any stock featured on our site or emails unless you can afford to lose your entire investment. The disclaimer is to be read and fully understood before using our services, joining our site or our email/blog list as well as any social networking platforms we may use.
PLEASE NOTE WELL: TNS LLC and its employees are not a Registered Investment Advisor, Broker Dealer or a member of any association for other research providers in any jurisdiction whatsoever.
Release of Liability: Through use of this website viewing or using you agree to hold TNS LLC, its operator’s owners and employees harmless and to completely release them from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. TNS LLC encourages readers and investors to supplement the information in these reports with independent research and other professional advice. All information on featured companies is provided by the companies profiled, or is available from public sources and TNS LLC makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies. None of the materials or advertisements herein constitute offers or solicitations to purchase or sell securities of the companies profiled herein and any decision to invest in any such company or other financial decisions should not be made based upon the information provide herein. Instead TNS LLC strongly urges you conduct a complete and independent investigation of the respective companies and consideration of all pertinent risks. Readers are advised to review SEC periodic reports: Forms 10-Q, 10K, Form 8-K, insider reports, Forms 3, 4, 5 Schedule 13D.
TNS LLC is compliant with the Can Spam Act of 2003. TNS LLC does not offer such advice or analysis, and TNS LLC further urges you to consult your own independent tax, business, financial and investment advisors. Investing in micro-cap and growth securities is highly speculative and carries an extremely high degree of risk. It is possible that an investor’s investment may be lost or impaired due to the speculative nature of the companies profiled.
The Private Securities Litigation Reform Act of 1995 provides investors a ‘safe harbor’ in regard to forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact may be “forward looking statements”. Forward looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through use of words such as “projects”, “foresee”, “expects”, “will”, “anticipates”, “estimates”, “believes”, “understands”, or that by statements indicating certain actions & quote; “may”, “could”, or “might” occur.
Understand there is no guarantee past performance will be indicative of future results. In preparing this publication, TNS LLC has relied upon information supplied by its customers, publicly available information and press releases which it believes to be reliable; however, such reliability cannot be guaranteed. Investors should not rely on the information contained in this website. Rather, investors should use the information contained in this website as a starting point for doing additional independent research on the featured companies. The advertisements in this website are believed to be reliable, however, TNS LLC and its owners, affiliates, subsidiaries, officers, directors, representatives and agents disclaim any liability as to the completeness or accuracy of the information contained in any advertisement and for any omissions of materials facts from such advertisement. TNS LLC is not responsible for any claims made by the companies advertised herein, nor is TNS LLC responsible for any other promotional firm, its program or its structure.
